Potential Oil Price Channel

A New Channel Low Would Confirm the Red Price Channel

A New Channel Low Would Confirm the Red Price Channel

Oil is trying to confirm a new price channel (red in chart above). If the channel confirms, oil will be in its critical decision wave for starting a bottom vs breaking out into a melt-down.

Oil Inverse Head and Shoulders with Megaphone Right Shoulder

Oil Inverse Head and Shoulders with Megaphone Right Shoulder

The green and purple scenarios would be pretty much the same as in this daily chart from a few days ago.  The green scenario could bog down at the red megaphone VWAP to form a triangle right shoulder instead of heading straight up through VWAP to the megaphone top.

The longer oil is stuck moving across 50, the bigger the potential move after it finally breaks out.  There’s a long-term Neely set-up for a move back to oil’s all-time high so I expect the churning across 50 to last a while.

AMZN Rising Wedge

A Super-Extended Move is a Neely Tell

AMZN is Now Coloring in the Top Third of the Red Rising Wedge

AMZN is Now Coloring in the Top Third of the Red Rising Wedge – A Neely Tell of a Major Top

AMZN is now coloring in the top third of the red rising wedge. That represents a super extended move and is a Neely tell of a major top forming.

AMZN could continue moving up the rising wedge, extending it into its very tip.  Or it could start a small fast megaphone inside the wedge to work the price to the wedge bottom before breakout into a crash from here.

Or it could extend the rising wedge into its tip then crash to the implied price channel bottom and make a new high from there before collapsing to the wedge bottom.

The first technical target for a correction is the rising wedge bottom at roughly 500.  Ultimately AMZN has to work its way back to the bottom of the purple rising megaphone at 100 as well.  But the route to that target could be very complicated and even include a new all-time high from 500 en route.

Unless some disaster is about to befall AMZN (like an antitrust suit and break-up), the most likely scenario is a drop to roughly the rising wedge bottom to establish a new megaphone trading range across roughly 600.  Some years down the road, from a new high, that megaphone could include a drop to 100.

XLE Megaphones with Potential Melt-Up Set-Up

XLE has a Potential Sornette Melt-Up Set-Up on its 60-Minute Chart

XLE has a Potential Sornette Melt-Up Set-Up on its 60-Minute Chart

XLE has formed a beautiful megaphone inside a megaphone on its 60-minute chart.  Even better, XLE has formed a potential Sornette melt-up launch pattern across VWAP of the red megaphone.

An upwards breakout through the navy blue megaphone VWAP, typically with a double bobble as the orange megaphone fails to retrace to VWAP, would target the red and blue megaphone tops.  The move would usually be fast (green scenario).

The light blue scenario represents a series of megaphones inside megaphones across the navy megaphone VWAP.  We’d usually see this is a triangle right shoulder is forming on the potential inverse head and shoulders bottom on the daily chart (see below).

The purple scenario represents a top before a collapse back to the 2016 (see below).

 

XLE Inverse H&S Bottom with Right  Shoulder Triangle vs Neely Set-Up

XLE Inverse H&S Bottom with Right Shoulder Triangle vs Neely Set-Up

XLE formed a price channel on its move down from the June 2014 high to the January 2016 low.  That kind of move is a Neely set-up for a partial retrace then retest of the low before a melt-up back to the all-time high (purple scenario).

The green scenario on the daily chart is a triangle right shoulder on the inverse H&S before a breakout to retest the all-time high.  It’s possible but unlike (because of the megaphones on the 60-minute chart) that XLE will break out of that inverse H&S without a triangle right shoulder.

The Neely set-up is the favorite longer-term.

ES Megaphone Welter

ES Red Flat-Topped Megaphone

ES Red Flat-Topped Megaphone vs Blue Megaphone

First, ES has nothing that even resembles a legal top on the daily chart yet.

Second, ES is trapped in a welter of megaphones inside megaphones within its trading range since the March 1 high. No way it escapes this mess easily.

ES has a kinda sorta flat-topped megaphone on the chart (red) and has put in a false breakout through its top at roughly the March 1 high.  That would usually mean a trip down to take out the formation low (green scenario) before a breakout through the top to morph the whole mess into the blue megaphone.

Or ES could still be working on getting straight to the area of the blue megaphone top (purple scenario).

There’s a small rising megaphone on the chart out of the April 17 low that didn’t top properly with a head and shoulders inside the formation.  That would usually mean we see another stab through 2400 even if the flat-topped megaphone is in play (orange scenario).

The proper attitude toward any move within the recent trading range right now is high skepticism.  The only exception would be if a price channel meltdown sets up.  No sign of that yet.